Brics recovery hinges on vaccination

Mumbai: While the Covid 19 pandemic resulted in India seeing the deepest economic contractions among the Brics countries, its recovery from the Covid-led slowdown is projected to be higher than other member nations, according to the Brics Economic Bulletin 2021, released by the RBI.

The report said, “Going forward, the pace and efficacy of vaccination is going to be the most important determinant of economic recovery.”

The Brics grouping comprises Brazil, Russia, India, China and South Africa.

The bulletin also said that the Covid crisis has led to significant economic losses and made the social fabric of the Brics countries fragile by amplifying unemployment, poverty, gender disparity and migration risks. The RBI released a bulletin prepared by the Brics Contingent Reserve Arrangement (CRA) Research Group with members from Brics central banks. India is the current Brics chair.

The report said the Covid crisis has indiscriminately affected all countries, including the Brics. However, there is a significant heterogeneity among the Brics in the duration and intensity of the pandemic. “While China could largely contain the spread of the debilitating infection, other Brics countries have witnessed multiple waves of infection,” it said.

“The Covid-19 health crisis has, in turn, led to a global economic crisis, threatening to exacerbate vulnerabilities in the form of income inequality and poverty. It has had a severe effect on the Brics countries as well, with India, Brazil and Russia in the top five countries in the world in terms of infections. Barring China, all the Brics countries recorded contraction in economic growth in 2020. The Brics countries have started showing signs of recovery in H2: 2020 from the deep contraction in H1: 2020 as corroborated by various economic indicators.”

If the growth momentum in the Brics countries, especially in China, slows down, global recovery could also see further headwinds to its growth momentum.